Telstra to distribute Microsoft's latest gadget

Mr Ballmer, fresh off a plane from Singapore, said Telstra would distribute Microsoft's latest gadget, the Pocket PC Phone Edition 2002, in Australia.

The new wireless device, which runs on the Windows Powered Microsoft Pocket PC Platform, can be used as a phone, a pocket PC, an entertainment tool and a personal organiser.

Mr Ballmer said the deal to take the new product to the market through Telstra was "spot on".

"The relationship with Telstra is a very important one for Microsoft," Mr Ballmer said at the launch. "It psyches me up quite a bit."
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He also commented on recent media speculation about the relationship between the two companies.

"I gather there is plenty of speculation about what kind of relationship we and Telstra have... the relationship between Microsoft and Telstra from my perspective continues to build over time," Mr Ballmer said.

"Sometimes we see things exactly the same, sometimes we don't."

The speculation follows reports that Microsoft stood to lose hundreds of millions of dollars in licence fees if Telstra shifted to the free open source operating system Linux.

Linux has already been adopted by Air New Zealand.

Telstra Retail group managing director Ted Pretty said the deal with Microsoft was an example of businesses aligning with each other to sell the products and services.

"It gives the connectivity to networks so they can communicate with others and communicate with their own business," Mr Pretty said at the launch.

"We have the same focus, Microsoft and Telstra, about delivering productivity to customers."

He added that plans for further alignments were on the cards over the next couple of years between the two companies.